Legal Market Overview
The jubilation that followed the Pakatan Harapan (PH) coalition’s victory in Malaysia’s general election of May 2018 has tempered over time, while the uncertainty and hesitancy on the Malaysian market continued into the first half of 2019, with major deals remaining quiet. Lawyers generally remain optimistic that M&A, IPOs, and real estate mandates will pick up as the political climate stabilises, while much of the country — according to national polls — grow frustrated that the new government’s pledged reforms have been slow to materialise.
One of the PH government’s main focuses since election has been on anti-corruption efforts, which have included launching criminal corruption cases against former officials (including former Prime Minister Najib Rasak, whose trial is ongoing at the time of writing) and reforms including amendments to the Malaysian Anti‑Corruption Commission Act, which will come into effect in June 2020.
Tax is another area which has seen reform, including with the replacement of the unpopular Goods and Services Tax with the Sales and Services Tax in June 2018, and the recent introduction of digital service tax for foreign service providers, which became effective on 1 January 2020. This has kept tax lawyers busy, both with compliance advice, and in refund and unfair tax application litigation.
Firms also continue to see a great deal of activity in technology mandates, particularly fintech, as well as healthcare, and oil and gas sectors; the latter being the backdrop for some of the largest deals in the market, including Murphy Oil’s $2.13bn sale of its oil and gas assets to Thailand’s PTT Exploration and Production Public Co, and the launch of the joint venture between Malaysia’s Sapura Energy and Austria’s OMV, Sapura OMV Upstream. Other notable transactions have included YTL Corp Bhd’s acquisition of Lafarge Malaysia Bhd.
Elsewhere, in the projects arena, some of the infrastructure projects that were previously put on hold following the election — including the China-based East Coast Rail Link — have resumed after renegotiation and significant reduction of construction cost. However, the high-profile plans for a Kuala Lumpur–Singapore high-speed rail continues to remain dormant.
The Malaysian legal market remains consistent in that numerous strong domestic full-service offerings continue to lead the way, with Herbert Smith Freehills LLP and Trowers & Hamlins LLP remaining the only international firms with offices in Kuala Lumpur. Several Malaysian firms benefit from international affiliations such as Wong & Partners, which is a member firm of Baker McKenzie International, Christopher & Lee Ong, a member of Rajah & Tann Singapore LLP’s regional network, and Zain & Co which merged with Dentons in 2018; Rahmat Lim & Partners, an associate firm of Allen & Gledhill LLP of Singapore and Lee Hishammuddin Allen & Gledhill, as well as Zaid Ibrahim & Co (a member of ZICO Law) are also worthy of note.
Other firms that are consistently well-ranked include, Shearn Delamore & Co, Skrine, Zul Rafique & Partners, Adnan Sundra & Low (which strengthened its offering, particularly for projects, infrastructure and energy sector work, with mergers with two boutique firms – Putri Norlisa Chair and Khem Thadani – in October 2018, and Chooi & Company and Cheang & Ariff, which includes merged legacy firms Chooi & Company and Cheang & Ariff.